FAIR VALUE MEASUREMENTS |
6 Months Ended | ||||||||||||||||||||||||||||||||||||
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Jun. 30, 2026 | |||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||
| FAIR VALUE MEASUREMENTS | NOTE 12 - FAIR VALUE MEASUREMENTS
The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, government grant receivables, prepaid expenses and other current assets, accounts payable and accrued expenses approximate fair value given the short-term nature of these instruments.
Management determined that the estimated fair value of the Company’s notes payable recorded at amortized cost approximates their carrying value as of June 30, 2026 due to the limited time remaining until maturity. Because the notes are scheduled to mature within twelve months of the balance sheet date, the effect of changes in market interest rates on fair value is not considered significant.
Recurring Fair Value Measurements
RPD Convertible Note-Related party
The fair value of the RPD Convertible Note as of June 30, 2026 was comprised of a single financial liability in which the Company elected the fair value option under ASC 825, Financial Instruments (“ASC 825”) with change in fair value recorded in change in fair value of debt in the unaudited interim condensed consolidated statements of operations. There was no change in the instrument specific credit risk during the three months ended June 30, 2026.
The company estimated and recorded the fair value of the RPD Convertible Note upon its issuance date of April 1 2026. The fair value of the RPD Convertible note as of June 30, 2026 was based on a bond plus option framework. The principal and interest cash flows were discounted at a rate which was back-solved as of the Issuance Date, then adjusted at each mark-to-market date to reflect changes in the rate corresponding to the company’s credit rating. The option valuation utilized Black Scholes option pricing model with two call options.
The valuation utilized significant Level 3 unobservable inputs including volatility, discount rate, and risk-free interest rate. Significant judgement is required in selecting the significant inputs and assumptions. Actual assumptions may differ from our current estimates and such difference could materially impact on the fair value of the RPD Convertible Note.
Refer to Note 11- “Notes and Convertible Notes Payable”, for the change in the carrying amount of the RPD Convertible note during the three months ended June 30, 2026.
Warrant Liabilities
Non-recurring Fair Value Measurements
Certain assets, including long-lived assets and certain financial instruments, are measured at fair value on a non-recurring basis if it is determined that impairment indicators are present using Level 3 inputs.
During the three and six months ended June 30, 2026 and 2025, the Company determined that no impairment indicators had occurred and consequently no impairments were recorded during these periods.
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